Use the profit motive to fight climate change

This news article was published under
the 2010 to 2015 Conservative and Liberal Democrat coalition government

Prime Minister David Cameron outlines the steps that the international community should take to prevent dangerous climate change; and identifies the huge economic opportunities from the transition to a low carbon economy.

Over the past twelve months we’ve seen the devastation that unchecked climate change could bring - floods in Pakistan, forest fires in Russia, mudslides in China. And yet over the same twelve months we’ve seen a growing despondency about international efforts to protect our planet. Copenhagen was a disappointment for everyone who cares about climate change. Though some important steps were taken, simply not enough progress was made. But today, as the world looks to Cancun, I want to argue that everyone who cares about climate change should take heart - because I believe there are three clear reasons to have hope for the future.

The first is that multilateral action is far from dead. British Ministers are going to Mexico this week with an approach that is both realistic and optimistic. Realistic, because we know that a global deal won’t be struck in Cancun - but optimistic too, because we are viewing this as a stepping stone to future agreement. The momentum for action is with us. Last year all the major economies - including both the US and China - put forward together, for the first time, the actions they would take to limit emissions. This year is about building on that and bringing a global deal closer, maintaining momentum through to next year’s summit in South Africa and beyond. It is vital that we demonstrate that progress is being made - and the responsibility rests with all of us to put our shoulder to the wheel and push things forward. Moving step by step might be frustrating, but the consolation is that we are clearly going in the right direction.

The second reason to take heart is that there is a hugely compelling economic case to be made for fighting climate change that is barely out of the blocks yet. Both developed and developing countries have the potential to make massive gains from a green economy; the low carbon market is already worth up to £3.2 trillion and is forecast to grow by around four per cent a year over the next five years. I passionately believe that by re-casting the argument for action on climate change away from the language of threats and punishments and into positive, profit-making terms, we can have a much wider impact. That’s why this government has set up the Capital Markets Climate Initiative - to help trigger a new wave of green investment in emerging economies and make the City of London the global capital of the fast-growing green investment sector.

That brings me to the third cause for hope - Britain’s ability to make change directly, even outside the progress made on multilateral decision-making. Yes, climate change is a global threat and yes, the UK only accounts for less than two per cent of the world’s emissions - but that doesn’t mean we have to wait around for a global deal in order to make a difference. For a start there’s a lot we can do bilaterally, both through government and through business. Earlier this month Britain and China agreed to work together to pilot low-carbon initiatives. The UK-India Business Leaders Climate Group has published its first report, full of ideas on joint research programmes and skills exchanges. We are providing technical assistance to Indonesia to tackle deforestation. And within the EU we are driving work to promote investment in low-carbon infrastructure. In so many ways we are already working directly with our friends to good effect.

We can also lead change with unilateral action - setting a shining example domestically for other countries to follow. When this coalition was formed I set out our ambition to be the greenest government ever and we are wasting no time in trying to achieve that. In the coming weeks and months we’ll be taking forward some major commitments including a new Green Deal that will insulate millions of homes, a Green Investment Bank to drive low-carbon growth and £860 million funding for a renewable heat initiative. This initiative alone is going to make a massive difference to our environment and to our economy. It will drive more by than tenfold the increase of renewable heat over the coming decade, radically reducing carbon emissions and creating thousands of jobs. Another major way the UK can make a difference is through our aid programmes - and our commitment to ring-fencing aid means we’re able to help the poorest countries cope with a changing climate and get access to clean energy.

So these are real causes for hope. The opportunity to make progress towards a global climate change deal. A compelling case to be made for countries the world over to move to low-carbon economies. A chance for Britain to make a difference both at home and in direct partnership with major economies. For all these reasons I believe we can be optimistic about the future. In the past decade we have seen a sea change in public attitudes to climate change and a hardening of political will to deal with it; over the next decade, I am convinced we can make a real difference.